The final public hearing of the Parliamentary inquiry into the implications of removing refundable franking credits will be held in Canberra.
The last public hearing of the inquiry will be held on Tuesday 26 March 2019, a week before the next sitting of Parliament – likely the last before the election.
The House of Representatives Committee inquiry, Chaired by Liberal MP Tim Wilson, will have held a total of 19 public hearings, including the four scheduled in Victoria next week. Tasmania and the Northern Territory are the only States or Territories not visited by the inquiry.
“The committee continues to gather evidence about how the removal of refundable franking credits would affect investors, particularly senior Australians whose financial security could be compromised,” said Mr Wilson.
In Canberra the inquiry will hear from The Australia Institute, Associate Professor Geoff Warren (in a private capacity), the Self-managed Independent Superannuation Funds Association (SISFA) and Industry Super Australia.
SISFA, in its submission to the inquiry, said that Labor’s policy to stop refunds of excess franking credits is regressive and inequitable. Associate Professor Warren has submitted research which finds Labor’s policy would add to the complexity of the retirement savings system and could have “adverse implications”.
The Australia Institute and Industry Super Australia are expected to argue in favour of Labor’s franking credit policy. The Australia Institute, which has called for changes to the dividend imputation system in the past, says the distribution of franking credits is “extremely skewed”.
“We found that of those people who lodged a tax return the top 1.4 per cent who earned $250,000 or more received 37.1 per cent of all the franking credits,” says the Institute, in its submission.
Industry Super Australia (ISA), in its submission, says that franking credits are “not neutral and would appear to distort personal tax neutrality”.
“Virtually all rebates in the personal taxation system are offsets, not credits. The notion that rebates should be taxed at the person’s marginal tax rate is a made-up principle which in this case appears to have been advanced to justify costly cash transfers to very wealthy cohorts who do not pay tax,” said ISA.
Mr Wilson said: “The hearing will also provide an opportunity for Australians impacted by a change to refundable franking credits to address the committee directly with a three minute statement, and we welcome their contributions and participation.”
The inquiry has no set date to publish a report. The next Parliamentary sitting is scheduled for April 2, with the election expected to be called soon after.